Steve Aschbruner

Commissioner David Stern told the media that the sides remain 'very, very far apart on virtually all issues.'

Photo courtesy NBA TV

No deal in labor talks, NBA cancels season's first two weeks

Posted Oct 11 2011 1:41AM - Updated Oct 11 2011 2:30AM

NEW YORK -- Casualty No. 1: The Chicago Bulls vs. the Dallas Mavericks, both the game and the championship ring ceremony for the Mavs that would have preceded it.

Casualty No. 2: The Oklahoma City Thunder taking on the Los Angeles Lakers at Staples Center later that evening in an early clash of Western Conference powers.

Casualties Nos. 3-100: The first two weeks of the NBA regular season, canceled late Monday after representatives of the league's owners and players met for seven hours but failed to reach a deal to end the costly labor lockout after 102 days. So the season-opening TNT doubleheader from Dallas and L.A. on Nov. 1 and everything on the NBA calendar through Nov. 14 -- gone.

"I'm sorry to report -- particularly for the thousands of people who depend on our industry for their livelihood -- that the first two weeks of the season have been canceled," NBA commissioner David Stern said. "We remain, really, very, very far apart on virtually all issues."

That gulf remains despite 12 hours of meetings Sunday and Monday in small-group sessions attended by the most central figures in the dispute and approximately 32 hours of bargaining since Sept. 30. Yet by the time the key figures -- Stern, deputy commissioner Adam Silver, union president Derek Fisher, union executive director Billy Hunter and others -- exited the hotel where they met on Manhattan's Upper East Side and talked with reporters out on the sidewalk, the two sides' differences defined them more than any common ground.

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"To be here at this point is disappointing in some ways," said Fisher, veteran guard for the Los Angeles Lakers, "but also as we've said all along, this is what we anticipated would probably happen. And here we are. So we'll deal with this with our chin up.

"This is a big blow, obviously, to our fans most importantly. They don't have a voice in this fight but we hear them loud and clearly that they want basketball. We want to play basketball."

Basketball, though, has been benched for the foreseeable future as the NBA loses games to a business squabble for only the second time in its history -- and for the second time in the past three negotiations of a collective bargaining agreement. A full-blown lockout was averted in 2005 but in 1998-99, the two sides battled until early January and salvaged only a 50-game season that ran from February into May before a full round of playoffs.

Arenas have been instructed to release the dates held for NBA games through the first half of November, and Stern made it sound as if more dates soon could follow.

"Every day goes by, we look at further reductions in what's left of the season," the commissioner said, though he stopped short of projecting an entire canceled 2011-12 season.

Hunter sounded alternately optimistic and pessimistic. First he suggested that the games lost in early November could be made up if a deal can be struck in the next two weeks.

Then he said: "They are more dug in than before. It goes back to a comment David made to me several years ago. He said, 'Look, this is what my owners have to have.' I said, 'The only way you're going to get that is if you're prepared to lock us out for a year or two.' He's indicated to me that he's willing to do it."

But Hunter followed that up with this: "I don't know that the season is in jeopardy. It would be foolish of them to kill the season. We're coming off the best season in the history of the NBA. I'm not so sure, in this kind of economy, if there is a protracted lockout, whether the league will recover."

No meeting has been scheduled to resume talks. Both sides will retreat to their corners -- the owners briefing their labor relations committee and then, next week, the Board of Governors. The players will huddle, too, and resume regional informational meetings while each side waits for the others to suggest more bargaining.

The owners imposed this lockout on July 1 after nearly two years of occasional contract talks went nowhere. The NBA has been seeking to repair a "broken system" that produced $300 million in losses in 2010-11, with 22 of the 30 franchises operated in the red.

In addition to salary givebacks from the players -- the owners are trying to cut total player compensation from 57 percent of basketball-related income to 47 percent in their latest proposal -- they want to alter the salary-cap system to prevent some teams from dramatically outspending others as a way of warping competitive balance. Their proposed solutions: a hard salary cap (compared to the long-established "soft" cap) or tougher luxury-tax penalties to further penalize the free-spending teams.

The players view a hard cap as a "blood issue" that will block any deal, and they see the severe tax system proposed by the owners -- with penalties increasing to $4 for every $1 by which a club's payroll exceeds the cap -- as a de facto hard cap. Their proposal calls for a 53-47 split of BRI in their favor, with basically the same soft cap system and smaller givebacks on exceptions and contract lengths than the owners are seeking.

The union also believes that, after their contribution of more than $1 billion over a six-year CBA, the owners can address other issues of profitability or competitive balance through more aggressive revenue-sharing among the teams. Stern already has promised a system with transfers from the league's have's to its have-not franchises of $180 million or more. But the owners contend they need to reduce salaries further -- and alter the way in which the players' guaranteed share of the BRI split gets paid out.

A surprise that came out of Monday's meeting was the acknowledgement by both sides that system issues were dividing them more than the economic split. Previously, it seemed that other areas of a CBA might fall into place if they only could agree on the size of their slices. That's what drove all the chatter about a 50-50 deal after Stern and Silver revealed that "concept" -- and how it had been floated to the players -- after a meeting last week.

Each side is back to seeking 53 percent of the financial pie for itself. But Stern and Fisher, independently while meeting with reporters, talked of how the math suggests a deal somewhere between those 53 percent and 47 percent figures.

The greater obstacles now seem to be the cap, any luxury tax, contract lengths, annual raises and various exceptions that depart dramatically from the system under which the NBA has operated for the past 13 years or, in some areas, longer.

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"It got to a point where, without the right system, the number really wouldn't matter," Fisher said after the two days of bargaining were spent entirely on system topics.

Said Silver: "They believe to the extent they're willing to make economic concessions, that we should be willing to leave the current system largely intact. Our view is that the current system is broken in that 30 teams are not in position to compete for championships.

"While we understand their position, we understand that change is difficult, it makes no sense for us to operate under the current model where [luxury] taxpayers, especially those taxpayers willing to spend $10 [million], $20 [million] and often even more money above the average team in this league, has a huge advantage over the other teams."

Here are some of the known differences in the proposals and ideas pitched by the two sides, from sources inside the room:

• The owners are seeking to reduce contract lengths to four years when re-signing their own players and three years for players coming from elsewhere. The players want contracts of five and four years, respectively. Under the most recent system, contracts could be up to six years for "Bird rights" players who stayed with their current clubs and five for others.

• Tax offenders, in the owners' proposal, would not be able to exercise Bird rights on its free agents, one union source said.

• The owners want to dramatically cut the annual raise built into contracts from 10.5 percent (Bird players re-signed) and 8.0 (others). The players want to reduce the raise amounts only slightly, to 9 percent and 7 percent for contracts of five years, , while maintaining the 10.5 and 8.0 raise figures for shorter deals. The union also argues that, since the BRI split fixes the players' compensation, the raise numbers shouldn't really matter; if one player gets that money, some other player cannot. The owners' liability doesn't increase.

• The mid-level exception, which allows any team to exceed the cap by signing a free agent to a contract based on the league's "average salary" of about $5.15 million, needs to be cut down in both length and dollars, the owners say. They are seeking a $3.0 million base on deals capped at three years. The players want mid-level contracts to start at $5 million and run for up to four seasons.

• The revised tax system suggested by the owners would not only increase the penalties for more profligate spending, it would punish repeat offenders more severely than other clubs. The players are open to a stiffer -- but not that stiff -- system of levies. But they believe that a lesser tax allows for more player movement and more secure individual contracts.

That the fighting now is over system issues suggests that the owners are more serious about fixing the league's system -- and not just interested in grabbing back as much money as possible -- than previous thought by some. Just when it was starting to appear that a favorable BRI split would send them home happy, Stern and Silver talked of the snap-back in leveling the playing field between large-revenue and small-revenue markets.

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"The issues on the competition side -- in order to have 30 teams be as competitive as they can and tell our fans that our markets and our teams could compete for a championship if well-managed -- have separated us greatly," Stern said.

The players, meanwhile, might be showing that their stance is not simply about preserving the size of their paychecks. The way they're arrived at, and the security and flexibility players have in their workplace choices, remain important.

Missing two weeks of games means losing paychecks worth about 8.3 percent of their annual salary -- or about $175 million for the first half of November. That's more than a drop from 53 percent to 50 percent of BRI would cost the players.

"Lost salary is obviously not a good feeling for anyone, even for our players," Fisher said. "But I think it continues to prove the message from our standpoint that this is not just about dollars and cents for players; it's about the system that NBA players can operate under, the opportunities that guys at every level -- max guys, mid-level guys, rookies, veterans -- will have to be able to play the game they love to play.

"The easy way out would have been for us to take the deal that is before us and just continue to have salaries come in."

And for those who would say that the owners have angled for this moment all along, to squeeze the players into a more favorable deal by going after their salaries?

"Everybody's waiting for the players to cave," Hunter said. "They think, once the players miss a check or two, it's all over. I'm saying to you, that would be a horrible mistake if they think that's going to happen. It's not going to happen. The players are all going to hang in there."